In a dramatic shift in the battle for Hollywood’s most prized assets, the board of Warner Bros. Discovery (WBD) is reportedly weighing a return to the negotiating table with Paramount Skydance. As of February 16, 2026, internal discussions have intensified following a series of “financial sweeteners” from Paramount aimed at derailing WBD’s existing merger agreement with Netflix.
While WBD had previously committed to a partial sale of its studios and streaming business (HBO) to Netflix, the revised $108.4 billion hostile tender offer from Paramount seeks to acquire the entire conglomerate.
The “Sweetened” Paramount Offer: Feb 2026
Paramount CEO David Ellison has introduced several aggressive financial provisions to address previous board concerns regarding regulatory delays and the high cost of breaking the Netflix contract.
| Feature | Detail | Impact |
| Headline Offer | $30.00 per share (All-Cash) | ~12% higher than Netflix’s current $27.75 bid. |
| Termination Fee | $2.8 Billion | Paramount will fully fund the penalty WBD owes to Netflix. |
| The “Ticking Fee” | $0.25 per share / quarter | Begins in 2027 if the deal hasn’t closed, totaling ~$650M/quarter. |
| Debt Backstop | Refinancing support | Eliminates a potential $1.5B financing cost for WBD. |
| Equity Guarantee | Larry Ellison | The Oracle co-founder has provided an “irrevocable personal guarantee” for $40.4B. |
The Rivalry: Full Acquisition vs. Strategic Split
The reopening of talks is a direct response to a fundamental difference in how the two suitors view WBD’s future.
- The Netflix Plan (The “Friendly” Deal): Netflix is only interested in the Warner Bros. Studios (Harry Potter, DC, Batman) and HBO. Under this plan, WBD’s linear networks (CNN, Discovery, Food Network) would be spun off into a new entity called “Discovery Global.”
- The Paramount Plan (The “Hostile” Bid): Paramount Skydance wants the entire company. By keeping the cable networks and studios together, they argue the combined entity (Paramount + WBD) would have superior leverage against Amazon, Disney, and Apple.
Investor and Activist Pressure
WBD CEO David Zaslav is facing mounting pressure from institutional investors who favor the higher per-share value of the Paramount bid.
- Activist Entry: Ancora Holdings Group (owning ~$200M in shares) and Pentwater Capital Management have publicly urged the board to engage with Paramount, arguing that the Netflix deal “does not pass the sniff test” for shareholder value.
- Shareholder Vote: WBD has scheduled a special meeting in April 2026 for shareholders to vote on the Netflix merger. Paramount is currently soliciting proxies to block this approval.
What Happens Next?
If the WBD board formally decides to reopen talks with Paramount, they are contractually obligated to notify Netflix first. This would likely trigger a final “bidding war” scenario where:
- Netflix may be forced to raise its all-cash offer above $30.00.
- Paramount might have to further sweeten its “ticking fee” or provide even deeper regulatory assurances.
- The February 20, 2026 deadline for Paramount’s current tender offer serves as the immediate “ticking clock” for the board’s response.
“The revised offer shows Paramount’s strong and unwavering commitment to delivering the full value WBD shareholders deserve… We are providing certainty in value and protection against market volatility.” — David Ellison, Chair and CEO, Paramount.
